Canopy Rivers Announces $80 Million Bank Debt Facility at PharmHouse

5:19 pm ET January 7, 2019(Globe Newswire)Print

Canopy Rivers Inc. ("Canopy Rivers" or the "Company") (TSXV: RIV) today announced that its 49%-owned joint venture PharmHouse Inc. ("PharmHouse") has entered into a syndicated credit facility (the "Credit Facility") with the Bank of Montreal ("BMO"), as agent and lead lender, and with Canadian Imperial Bank of Commerce and Concentra Bank as lenders (together with BMO, the "Lenders"). Under the terms of the Credit Facility, the Lenders will provide PharmHouse up to C$80 million of secured debt financing at a rate of interest that is expected to average in the mid-to-high 5% per annum range over its three-year term.

"We are proud to be entering the new year with a significant financial development for PharmHouse, a joint venture we consider well-positioned to pursue the increasingly global cannabis opportunity. Having secured what we believe to be the largest bank debt to a private company in the cannabis industry, one that is supported by a syndicate of three Schedule I banks, PharmHouse has gained substantial momentum," said Bruce Linton, Chairman and Chief Executive Officer of Canopy Rivers. "We believe the commitment made by these leading Canadian financial institutions demonstrates confidence in PharmHouse and sheds meaningful light on the quality of the infrastructure, the level of expertise of the joint venture partners, and the anticipated significant near-term cash flow of this platform," continued Linton.

The Credit Facility will be used to finalize the acquisition of the 1.3 million square foot modern greenhouse facility and further fund necessary project equipment and ongoing construction costs as the production and distribution platform ramps up. The Credit Facility is being secured by the Company and its wholly-owned subsidiary, Canopy Rivers Corporation, and contains customary financial and restrictive covenants. Additional details on the Credit Facility can be found in the Company's documents, which will be filed under the Company's profile on SEDAR at www.sedar.com.

"Closing this credit facility is a major milestone for both PharmHouse and Canopy Rivers," said Eddie Lucarelli, Chief Financial Officer of Canopy Rivers. "This strategic and non-dilutive financing is a testament to the dedication of our team in identifying and optimizing the most attractive sources of capital at both the portfolio partner and corporate levels."

The PharmHouse joint venture operates out of an ultramodern greenhouse facility in Leamington, Ontario, constructed in 2017 using the latest in commercial agriculture technology and featuring state-of-the-art automation systems. PharmHouse has already secured multiple offtake agreements, with purchase orders in place for an aggregate 30% of the production capacity upon licensing.

Canopy Rivers and its PharmHouse joint venture partner, a company formed by the leading principals and operators of a North American agriculture conglomerate, seek to leverage their relationship networks and respective strengths in cannabis, global commercial agriculture, marketing, and distribution to pursue regulated cannabis opportunities together on a global scale. The Leamington facility represents the first stage of a planned global strategic relationship between the joint venture partners.

"With $140 million of fully funded capital, modern infrastructure that is being converted for cannabis cultivation, and operators with tier one agriculture and distribution expertise, we believe this initial platform will produce a significant amount of cannabis for distribution within the Canopy Rivers ecosystem and beyond," said Olivier Dufourmantelle, Chief Operating Officer at Canopy Rivers and a director of PharmHouse. "The development of the PharmHouse platform has been on time and on budget. As economic activity and regulatory reform continues in North America and in new jurisdictions globally, we look forward to building on this success and leveraging the benefits of our global cannabis exclusivity with our joint venture partners," continued Dufourmantelle.

About Canopy Rivers Inc.

Canopy Rivers is a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector. Canopy Rivers works collaboratively with Canopy Growth (TSX: WEED, NYSE: CGC) to identify strategic counterparties seeking financial and/or operating support. Canopy Rivers has developed an investment ecosystem of complementary cannabis operating companies that represent various segments of the value chain across the emerging cannabis sector. As the portfolio continues to develop, constituents will be provided with opportunities to work with Canopy Growth and collaborate among themselves, which Canopy Rivers believes will maximize value for its shareholders and foster an environment of innovation, synergy and value creation for the entire ecosystem.

Forward-Looking Statements

This news release contains statements which constitute "forward-looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities and operating performance. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and includes information regarding the expected annual interest rate under the Credit Facility, the ability of PharmHouse to pursue international opportunities in the cannabis sector, the anticipated cash-flow of PharmHouse, the use of the proceeds of the Credit Facility, the business and operations of PharmHouse, the production of cannabis by PharmHouse, cannabis regulatory reform in the United States and internationally and other expectations for other economic, business, and/or competitive factors.

Investors are cautioned that forward-looking information is not based on historical facts but instead reflects management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: regulatory and licensing risks; construction and development risks; the ability of PharmHouse to obtain a license under applicable legislation in Canada; the actual operating and financial performance of PharmHouse; the global commercial agriculture, marketing, and distribution expertise and relationship networks of the joint venture partner; changes in general economic, business and political conditions, including changes in the financial markets; the global regulatory landscape and enforcement related to cannabis, including political risks and risks relating to regulatory change; risks relating to anti-money laundering laws; compliance with extensive government regulation; public opinion and perception of the cannabis industry; as well as the risk factors set out in the joint management information circular of Canopy Rivers Corporation and the Company dated August 8, 2018, filed with Canadian securities regulators and available on the Company's issuer profile on SEDAR at www.sedar.com.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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